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23 Jun, 2015 14:20

​Sanctions create favorable conditions for Russian industry – trade minister

The sanctions have multiple advantages for Russia, as they motivate companies to turn to domestically produced goods and boost the economy, Russian Industry and Trade Minister Denis Manturov told RT.

“I don’t want to sound cynical, but since I’m in charge of the real sector of the economy, in charge of the Russian industry, I can say we’ve actually benefited in more ways than one from sanctions imposed last year,” said Manturov at the St. Petersburg Economic Forum (SPIEF), adding that before the sanctions were put into effect Russian companies paid less attention to domestic products.

READ MORE: 2015 St. Petersburg International Economic Forum LIVE UPDATES

"...now sanctions provided them [companies and consumers - Ed.] with additional motivation, and they are turning to Russian companies. This generates demand for the Russian industry. So, to me, this was an advantage, in a sense," he added.

READ MORE: EU extends economic sanctions against Russia for 6 months - official

Although it became harder to attract funds from Western markets because of the limitations, they, in turn, stimulate Russian banks and the Central Bank to lower interest rates and to provide loans on a competitive basis for Russian companies, Manturov said.

The EU announced on Monday that the sanctions against Russia are being extended until January 31, 2016 to ensure the Minsk agreement is implemented.

The sanctions include restrictions on lending to major Russian state-owned banks, defense and oil companies. The limitations also apply to the supply of weapons and military equipment to Russia as well as military technology, dual-use technology, and high-tech equipment and technology for oil production.

READ MORE: India to sign free trade deal with Russia-led Eurasian Economic Union

The potential deal to create a free trade zone with India and similar agreements between the Eurasian Economic Union (EEU) and Vietnam have inspired more countries to expand the common market, said Manturov, adding that he had already been in talks on the issue with the Egyptian minister of industry.

“We will move towards signing an agreement on a free trade zone with Egypt, as we did with Vietnam. Russia, as a member of the EEU, will actively participate in this work to take into account its interests in this process,” he said.

The EEU and Vietnam signed a free trade zone agreement on May 29. It became the first free trade zone between the EEU and a third party.

READ MORE: Vietnam signs free trade deal with Russia-led EEU economic block

On June 18 the EEU and India started talks over a free trade zone and signed a framework agreement at the International Economic Forum in St. Petersburg. The Eurasian Economic Commission Trade Minister Andrei Slepnev said he expects a similar deal to be signed with Iran soon.